Current Issues

Investors should ensure that they fully understand the information that is contained
within these documents and comprehend and accept the risks to which their capital
may be exposed. They should also appreciate any security that is offered as
well as where their loan to the issuer will sit in its debt capital structure.

If in any doubt Retail Bond Expert recommends that before participating, would-be
investors seek professional advice appropriate to their level of financial
literacy and investment experience.

Specialist mortgage lender BlueZest has today announced the proposed issue of sterling-denominated
5.25% fixed rate secured bonds due 2022; it is the first of a series of bonds
to be issued under its £1,500,000,000 secured retail bond programme through which it plans to issue £2-300 million per year.

They
will be issued by BlueZest Secured Retail Bond PLC, a wholly owned subsidiary
of BlueZest Mortgages and Loans Ltd (Blue Zest); the bonds are available to
retail and institutional investors and the proceeds of each issue will pass to
BlueZest via a loan agreement for the conduct of its mortgage lending business to customers secured against UK residential
(non-development) property.

The offer
period opened today (27th November 2017) and is expected to close at 12 noon
GMT on 12th December 2017; the arranger and dealer, Monsas Limited, retains the
right to close the offer early, in conjunction with BlueZest and the issuer.

The bonds are prime, un-subordinated, debt securities; BlueZest is a new mortgage lender so the underlying asset is all UK prime mortgages.

BlueZest
is a specialist mortgage lender which utilises its proprietary technology
decision-making software solution called the ‘Zest Engine’ in offering a range
of carefully tailored buy to let and mortgage products.

The
company's focus is on lending to landlords, developers and small business
owners, who have UK residential property to provide as security.

BlueZest
offers its clients a supportive business relationship as a preferred financing
partner, built around open and honest fee structures, fast decisions and
customer-focused operations; the company is committed to delivering what it
calls 'The BlueZest Advantage’.

Features of the Bonds include:

· Application has been made to admit the Bonds to
listing on the Official List of the Financial Conduct Authority and to trading
on the regulated market of the London Stock Exchange plc (‘LSE’) and through
the Order Book for Fixed Income Securities (OFIS): one of the electronic
trading services operated by the LSE for retail bonds.

· The bonds will bear interest at a fixed rate of
5.25% per annum, with the first coupon payable on 15 June 2018 and then
quarterly in arrears on or about 15th September, 15th December, 15th March and
15th June every year until the maturity of the bonds on 15th December 2022
unless previously redeemed.

· The bonds have a minimum initial subscription amount
of £1,000 and are available in multiples of £100 thereafter

· The bonds, once issued, will benefit from a number
of security interests granted by both BlueZest and the issuer, as more
particularly described in the previous announcement dated 22th November, the
Base Prospectus dated 22th November and the Final Terms dated 27th November
2017 (see more details here)

· The Issuer has appointed experienced service
providers to act as corporate services provider, cash manager, calculation
agent, registrar and paying agent

· The 5.25% bonds due 2022 are expected to be the
first series of bonds issued under the programme with frequent issues of 1, 3
and 5 year bonds to follow

Security

Bonds
issued under the programme will benefit from a number of security interests to
be granted by BlueZest and the issuer and held on behalf of bondholders and
other secured creditors by Capita Trust Company Limited as trustee.

The
security package includes (without limitation) security granted over and in
respect of:

·
Each UK residential property-backed mortgage loan that BlueZest originates
using the proceeds of the bonds;

· A mortgage indemnity guarantee, arranged by BlueZest with AmTrust Europe
Limited, a global insurer and part of the ‘A’-rated AmTrust Financial Group.
The AmTrust Europe policy, taken out against each mortgage loan that BlueZest
originates using the proceeds of bonds, provides insurance against borrower
default and subsequent losses suffered by BlueZest; and

·
Certain bank accounts which will be opened with a global financial institution
into which the net proceeds of the issue of bonds under the programme will be
held (pending utilisation for mortgage loan completions) and collections will
be received from customers and held until they are used to pay amounts due on
the bonds.

Leveraging its management team's experience of the
UK residential mortgage market, its track record in servicing loans and
BlueZest's proprietary straight-through processing technology, BlueZest
believes it is well positioned to meet the demands of a buy-to-let market
seeking professional and modern lending companies able to provide seamless and
rapid turnaround.

BlueZest operates between traditional banks and alternative
fund platforms to fill the funding gap that exists in the UK mortgage market,
and deliver an innovative
proposition
for underserved buy-to-let landlords; it boasts a strong team with deep experience in the mortgage lending sector, including some of the key players behind Pepper Home loans and Experian where they spent a few decades building mortgage risk decision systems

In
announcing the offer, Chris Slater, Chief Executive of BlueZest commented: ‘The
BlueZest Secured Retail Bond arrives at a time when demand in the UK’s
residential property market continues to outpace supply. BlueZest is determined
to support professional property investors, providing a crucial alternative
funding source, enabled by our retail bond.’

‘In
the environment of subdued bank lending, we offer a compelling solution for
borrowers, our 'straight-through' lending process uses innovative technologies
and data which can deliver binding mortgage offers in 30 minutes. BlueZest is
underpinned by a management team with extensive risk, technology, funding and
compliance experience of the UK residential mortgage market, and a strong track
record in establishing new mortgage platforms in different markets.’

Demand
for retail bonds from investors has been strong, but there has been a dearth of
offers of late, particularly on the LSE’s Order Book for Retail Bonds (ORB); if
BlueZest announces its programme it is likely to be well supported by those
seeking income and the concept of regular issuance may appeal to those that
have been thwarted in the past when the offer period of an oversubscribed bond
has been cut short.